The overall PMI shows we are still in rate cut territory. But the PMI has been below this (current) level and the ECB has not cut rates, so this survey on its own will add little to the chance of a rate cut.
Without Germany seeing its improvement in growth, we would have seen a much stronger downturn (in the euro zone index).
Primarily, we suspect this is an oil price-induced global downturn that is hitting export growth. Secondly, there has been some evidence of demand cooling in China.
As we saw last month, there were signs of increased overseas spending on UK services.
Things are very much dependent on exports at the moment and the euro may hold the key to Italy's performance.
High oil prices are hitting costs and forcing manufacturers to look at how they can streamline their operations. Manufacturers are still shedding workers despite seeing output and orders increase.
France once again continues to buck the trend although there is increasing divergence.
This survey is indicating that the move in (ECB) rates might be earlier rather than later.
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